Note 16 Financial Information for the Company and its Subsidiaries

Brown Shoe Company, Inc. issued senior notes, which are fully and unconditionally and jointly and severally guaranteed by all of its existing and future subsidiaries that are guarantors under its existing Credit Agreement. See Note 10 to the condensed consolidated financial statements for additional information related to our long-term and short-term financing arrangements. The following table presents the condensed consolidating financial information for each of Brown Shoe Company, Inc. ("Parent"), the guarantors and subsidiaries of the Parent that are not guarantors (the "Non-Guarantors"), together with consolidating eliminations, as of and for the periods indicated.

The condensed consolidating financial statements have been prepared using the equity method of accounting in accordance with the requirements for presentation of such information. Management believes that the information, presented in lieu of complete financial statements for each of the guarantors, provides meaningful information to allow investors to determine the nature of the assets held by, and operations and cash flows of, each of the consolidated groups.

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

AS OF JULY 28, 2012


							Non-
($ thousands)		Parent		Guarantors			Guarantors		Eliminations			Total
Assets
Current assets
Cash and cash equivalents		$ –	$	30,760		$	16,637	$	–		$	47,397
Receivables		87,314		23,313			23,389		–			134,016
Inventories		119,174		486,063			15,830		–			621,067
Prepaid expenses and other current assets		41,360		5,564			2,576		–			49,500
Total current assets		247,848		545,700			58,432		–			851,980
Other assets		116,254		19,294			848		–			136,396
Goodwill and intangible assets, net		39,402		15,600			76,072		–			131,074
Property and equipment, net		23,470		102,246			9,008		–			134,724
Investment in subsidiaries		829,881		70,656			–		(900,537	)		–
Total assets	$	1,256,855	$	753,496		$	144,360	$	(900,537	)	$	1,254,174

Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	116,000		$ –			$ –	$	–		$	116,000
Trade accounts payable		76,872		183,987			33,396		–			294,255
Other accrued expenses		64,434		75,334			9,070		–			148,838
Total current liabilities		257,306		259,321			42,466		–			559,093
Other liabilities
Long-term debt		198,726		–			–		–			198,726
Other liabilities		31,338		43,422			13,897		–			88,657
Intercompany payable (receivable)		362,584		(379,128	)		16,544		–			–
Total other liabilities		592,648		(335,706	)		30,441		–			287,383
Equity
Brown Shoe Company, Inc. shareholders' equity		406,901		829,881			70,656		(900,537	)		406,901
Noncontrolling interests		–		–			797		–			797
Total equity		406,901		829,881			71,453		(900,537	)		407,698
Total liabilities and equity	$	1,256,855	$	753,496		$	144,360	$	(900,537	)	$	1,254,174

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

FOR THE THIRTEEN WEEKS ENDED JULY 28, 2012


								Non-
($ thousands)		Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	166,415		$	438,617		$	47,146		$	(52,899	)	$	599,279
Cost of goods sold		132,317			247,914			38,133			(52,899	)		365,465
Gross profit		34,098			190,703			9,013			–			233,814
Selling and administrative expenses		44,636			172,585			2,040			–			219,261
Restructuring and other special charges, net		4,612			2,879			–			–			7,491
Impairment of intangible assets		5,777			–			–			–			5,777
Equity in (earnings) loss of subsidiaries		(13,900	)		(6,601	)		–			20,501			–
Operating (loss) earnings		(7,027	)		21,840			6,973			(20,501	)		1,285
Interest expense		(5,758	)		–			–			–			(5,758	)
Interest income		–			63			14			–			77
Intercompany interest income (expense)		3,120			(3,227	)		107			–			–
(Loss) earnings before income taxes		(9,665	)		18,676			7,094			(20,501	)		(4,396	)
Income tax benefit (provision)		7,130			(4,776	)		(672	)		–			1,682
Net (loss) earnings		(2,535	)		13,900			6,422			(20,501	)		(2,714	)
Net loss attributable to noncontrolling interests		–			–			(179	)		–			(179	)
Net (loss) earnings attributable to Brown Shoe Company,
Inc.	$	(2,535	)	$	13,900		$	6,601		$	(20,501	)	$	(2,535	)

Comprehensive (loss) income	$	(3,083	)	$	12,969		$	6,427		$	(20,501	)	$	(4,188	)
Comprehensive loss attributable to noncontrolling
interests		–			–			(185	)		–			(185	)
Comprehensive (loss) income attributable to Brown Shoe
Company, Inc.	$	(3,083	)	$	12,969		$	6,612		$	(20,501	)	$	(4,003	)

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

FOR THE TWENTY-SIX WEEKS ENDED JULY 28, 2012


								Non-
($ thousands)		Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	357,170		$	876,377		$	90,968		$	(98,795	)	$	1,225,720
Cost of goods sold		278,215			497,508			75,914			(98,795	)		752,842
Gross profit		78,955			378,869			15,054			–			472,878
Selling and administrative expenses		85,605			340,853			11,717			–			438,175
Restructuring and other special charges, net		8,274			10,672			–			–			18,946
Impairment of intangible assets		5,777			–			–			–			5,777
Equity in (earnings) loss of subsidiaries		(14,821	)		(2,841	)		–			17,662			–
Operating (loss) earnings		(5,880	)		30,185			3,337			(17,662	)		9,980
Interest expense		(11,914	)		(1	)		–			–			(11,915	)
Interest income		1			124			35			–			160
Intercompany interest income (expense)		6,528			(6,741	)		213			–			–
(Loss) earnings before income taxes		(11,265	)		23,567			3,585			(17,662	)		(1,775	)
Income tax benefit (provision)		10,425			(8,746	)		(990	)		–			689
Net (loss) earnings		(840	)		14,821			2,595			(17,662	)		(1,086	)
Net loss attributable to noncontrolling interests		–			–			(246	)		–			(246	)
Net (loss) earnings attributable to Brown Shoe Company,
Inc.	$	(840	)	$	14,821		$	2,841		$	(17,662	)	$	(840	)

Comprehensive (loss) income	$	(1,420	)	$	14,519		$	2,599		$	(17,662	)	$	(1,964	)
Comprehensive loss attributable to noncontrolling
interests		–			–			(250	)		–			(250	)
Comprehensive (loss) income attributable to Brown Shoe
Company, Inc.	$	(1,420	)	$	14,519		$	2,849		$	(17,662	)	$	(1,714	)

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE TWENTY-SIX WEEKS ENDED JULY 28, 2012


								Non-
($ thousands)		Parent			Guarantors			Guarantors			Eliminations		Total
Net cash provided by operating activities	$	31,083		$	71,866		$	16,411		$	–	$	119,360

Investing activities
Purchases of property and equipment		(1,525	)		(21,738	)		(883	)		–		(24,146	)
Capitalized software		(2,953	)		–			(3	)		–		(2,956	)
Net cash used for investing activities		(4,478	)		(21,738	)		(886	)		–		(27,102	)

Financing activities
Borrowings under revolving credit agreement		334,000			–			–			–		334,000
Repayments under revolving credit agreement		(419,000	)		–			–			–		(419,000	)
Dividends paid		(6,005	)		–			–			–		(6,005	)
Issuance of common stock under share-based plans, net		(2,058	)		–			–			–		(2,058	)
Tax benefit related to share-based plans		738			–			–			–		738
Intercompany financing		70,106			(53,482	)		(16,624	)		–		–
Net cash used for financing activities		(22,219	)		(53,482	)		(16,624	)		–		(92,325	)
Effect of exchange rate changes on cash and cash
equivalents		–			(218	)		–			–		(218	)
Increase (decrease) in cash and cash equivalents		4,386			(3,572	)		(1,099	)		–		(285	)
Cash and cash equivalents at beginning of period		(4,386	)		34,332			17,736			–		47,682
Cash and cash equivalents at end of period		$ –		$	30,760		$	16,637		$	–	$	47,397

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF JANUARY 28, 2012


								Non -
($ thousands)		Parent			Guarantors			Guarantors		Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	(4,386	)	$	34,332		$	17,736	$	–		$	47,682
Receivables		78,129			24,082			51,811		–			154,022
Inventories		129,776			418,264			13,757		–			561,797
Prepaid expenses and other current assets		35,625			14,685			1,327		–			51,637
Total current assets		239,144			491,363			84,631		–			815,138
Other assets		115,515			23,844			918		–			140,277
Goodwill and intangible assets, net		47,765			16,160			76,665		–			140,590
Property and equipment, net		23,621			97,887			9,963		–			131,471
Investment in subsidiaries		813,602			68,057			–		(881,659	)		–
Total assets	$	1,239,647		$	697,311		$	172,177	$	(881,659	)	$	1,227,476

Liabilities and Equity
Current liabilities:
Borrowings under revolving credit agreement	$	201,000		$	–		$	–	$	–		$	201,000
Trade accounts payable		49,238			92,431			48,942		–			190,611
Other accrued expenses		60,079			65,676			7,214		–			132,969
Total current liabilities		310,317			158,107			56,156		–			524,580
Other liabilities:
Long-term debt		198,633			–			–		–			198,633
Other liabilities		29,702			46,717			14,128		–			90,547
Intercompany payable (receivable)		288,326			(321,115	)		32,789		–			–
Total other liabilities		516,661			(274,398	)		46,917		–			289,180
Equity:
Brown Shoe Company, Inc. shareholders' equity		412,669			813,602			68,057		(881,659	)		412,669
Noncontrolling interests		–			–			1,047		–			1,047
Total equity		412,669			813,602			69,104		(881,659	)		413,716
Total liabilities and equity	$	1,239,647		$	697,311		$	172,177	$	(881,659	)	$	1,227,476

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

AS OF JULY 30, 2011


							Non-
($ thousands)		Parent		Guarantors			Guarantors		Eliminations			Total
Assets
Current assets
Cash and cash equivalents		$ –	$	30,978		$	31,575	$	–		$	62,553
Receivables		82,617		33,965			42,013		–			158,595
Inventories		118,498		497,631			11,800		–			627,929
Prepaid expenses and other current assets		26,267		18,671			4,422		–			49,360
Total current assets		227,382		581,245			89,810		–			898,437
Other assets		113,277		25,160			672		–			139,109
Goodwill and intangible assets, net		50,522		16,720			107,057		–			174,299
Property and equipment, net		24,428		105,738			8,912		–			139,078
Investment in subsidiaries		615,152		88,654			–		(703,806	)		–
Total assets	$	1,030,761	$	817,517		$	206,451	$	(703,806	)	$	1,350,923


Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	250,000		$ –			$ –	$	–		$	250,000
Trade accounts payable		67,893		177,936			49,997		–			295,826
Other accrued expenses		64,506		64,953			10,239		–			139,698
Total current liabilities		382,399		242,889			60,236		–			685,524
Other liabilities
Long-term debt		198,540		–			–		–			198,540
Other liabilities		16,614		41,863			17,660		–			76,137
Intercompany payable (receivable)		43,131		(82,387	)		39,256		–			–
Total other liabilities		258,285		(40,524	)		56,916		–			274,677
Equity
Brown Shoe Company, Inc. shareholders' equity		390,077		615,152			88,654		(703,806	)		390,077
Noncontrolling interests		–		–			645		–			645
Total equity		390,077		615,152			89,299		(703,806	)		390,722
Total liabilities and equity	$	1,030,761	$	817,517		$	206,451	$	(703,806	)	$	1,350,923

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

FOR THE THIRTEEN WEEKS ENDED JULY 30, 2011


								Non-
($ thousands)		Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	162,265		$	448,767		$	62,178		$	(52,620	)	$	620,590
Cost of goods sold		128,278			258,419			52,908			(52,620	)		386,985
Gross profit		33,987			190,348			9,270			–			233,605
Selling and administrative expenses		44,196			184,810			4,908			–			233,914
Restructuring and other special charges, net		689			–			–			–			689
Equity in (earnings) loss of subsidiaries		(5,873	)		(4,779	)		–			10,652			–
Operating (loss) earnings		(5,025	)		10,317			4,362			(10,652	)		(998	)
Interest expense		(6,517	)		(10	)		7			–			(6,520	)
Loss on early extinguishment of debt		(1,003	)		–			–			–			(1,003	)
Interest income		–			44			21			–			65
Intercompany interest income (expense)		4,034			(4,137	)		103			–			–
(Loss) earnings before income taxes from continuing
operations		(8,511	)		6,214			4,493			(10,652	)		(8,456	)
Income tax benefit (provision)		3,902			(1,024	)		127			–			3,005
Net (loss) earnings from continuing operations		(4,609	)		5,190			4,620			(10,652	)		(5,451	)
Discontinued operations:
Earnings from operations of subsidiary, net of tax		–			683			–			–			683
Net earnings from discontinued operations		–			683			–			–			683
Net (loss) earnings		(4,609	)		5,873			4,620			(10,652	)		(4,768	)
Net loss attributable to noncontrolling interests		–			–			(159	)		–			(159	)
Net (loss) earnings attributable to Brown Shoe
Company, Inc.	$	(4,609	)	$	5,873		$	4,779		$	(10,652	)	$	(4,609	)

Comprehensive (loss) income	$	(4,951	)	$	5,754		$	4,715		$	(10,652	)	$	(5,134	)
Comprehensive loss attributable to noncontrolling
interests		–			–			(145	)		–			(145	)
Comprehensive (loss) income attributable to Brown
Shoe Company, Inc.	$	(4,951	)	$	5,754		$	4,860		$	(10,652	)	$	(4,989	)

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

FOR THE TWENTY-SIX WEEKS ENDED JULY 30, 2011


								Non-
($ thousands)		Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	331,465		$	883,379		$	111,247		$	(85,946	)	$	1,240,145
Cost of goods sold		253,321			497,043			94,158			(85,946	)		758,576
Gross profit		78,144			386,336			17,089			–			481,569
Selling and administrative expenses		87,877			364,982			15,195			–			468,054
Restructuring and other special charges, net		2,433			–			–			–			2,433
Equity in (earnings) loss of subsidiaries		(11,603	)		(2,990	)		–			14,593			–
Operating (loss) earnings		(563	)		24,344			1,894			(14,593	)		11,082
Interest expense		(13,206	)		(11	)		(1	)		–			(13,218	)
Loss on early extinguishment of debt		(1,003	)		–			–			–			(1,003	)
Interest income		–			99			51			–			150
Intercompany interest income (expense)		8,254			(8,521	)		267			–			–
(Loss) earnings before income taxes from continuing
operations		(6,518	)		15,911			2,211			(14,593	)		(2,989	)
Income tax benefit (provision)		5,597			(5,284	)		573			–			886
Net (loss) earnings from continuing operations		(921	)		10,627			2,784			(14,593	)		(2,103	)
Discontinued operations:
Earnings from operations of subsidiary, net of tax		–			976			–			–			976
Net earnings from discontinued operations		–			976			–			–			976
Net (loss) earnings		(921	)		11,603			2,784			(14,593	)		(1,127	)
Net loss attributable to noncontrolling interests		–			–			(206	)		–			(206	)
Net (loss) earnings attributable to Brown Shoe
Company, Inc.	$	(921	)	$	11,603		$	2,990		$	(14,593	)	$	(921	)

Comprehensive (loss) income	$	(959	)	$	15,522		$	592		$	(14,593	)	$	562
Comprehensive loss attributable to noncontrolling
interests		–			–			(184	)		–			(184	)
Comprehensive (loss) income attributable to Brown
Shoe Company, Inc.	$	(959	)	$	15,522		$	776		$	(14,593	)	$	746

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE TWENTY-SIX WEEKS ENDED JULY 30, 2011


								Non-
($ thousands)		Parent			Guarantors			Guarantors			Eliminations			Total
Net cash (used for) provided by operating activities	$	(15,888	)	$	42,063		$	17,233		$	55		$	43,463

Investing activities
Purchases of property and equipment		(1,204	)		(12,717	)		(762	)		–			(14,683	)
Capitalized software		(6,898	)		(200	)		–			–			(7,098	)
Acquisition cost		–			–			(156,636	)		–			(156,636	)
Cash recognized on initial consolidation		–			3,121			–			–			3,121
Net cash used for investing activities		(8,102	)		(9,796	)		(157,398	)		–			(175,296	)

Financing activities
Borrowings under revolving credit agreement		965,500			–			–			–			965,500
Repayments under revolving credit agreement		(913,500	)		–			–			–			(913,500	)
Proceeds from issuance of 2019 Senior Notes		198,540			–			–			–			198,540
Redemption of 2012 Senior Notes		(150,000	)		–			–			–			(150,000	)
Dividends paid		(6,197	)		–			–			–			(6,197	)
Debt issuance costs		(5,828	)		–			–			–			(5,828	)
Acquisition of treasury stock		(22,408	)		–			–			–			(22,408	)
Issuance of common stock under share-based plans, net		693			–			–			–			693
Tax deficiency related to share-based plans		(453	)		–			–			–			(453	)
Intercompany financing		(42,357	)		(29,875	)		72,287			(55	)		–
Net cash provided by (used for) financing activities		23,990			(29,875	)		72,287			(55	)		66,347
Effect of exchange rate changes on cash and cash
equivalents		–			1,491			–			–			1,491

Increase (decrease) in cash and cash equivalents		–			3,883			(67,878	)		–			(63,995	)
Cash and cash equivalents at beginning of period		–			27,095			99,453			–			126,548
Cash and cash equivalents at end of period		$ –		$	30,978		$	31,575		$	–		$	62,553